Globalisation

Question 1

Explain how improvements in communications (ICT) have increased globalisation. (2)

Answer 1

1) Email, Internet, mobile phones, phone lines can carry more info and faster
2) Makes it easier for businesses all over the world to communicate with each other. Overseas headquarters and branches in other countries. Increases efficiency

Question 2

Explain how improvements in transport have increased globalisation. (3)

Answer 2

1) Fuel efficiency: planes and ships carry more over longer distances.
2) Containerisation and automation i.e more trade by shipping containers.
3) This increases trade -easier to export product around the world

Question 3

Explain why call centres are more commonly found overseas nowadays. (2)

Answer 3

1) It’s just as easy to phone a faraway country as to phone in one’s own country.
2) Labour is cheaper abroad which reduces running costs.

Question 4

What is a localised industrial region?

Describe the example of Motorsport companies in Oxfordshire and Northamptonshire.

Answer 4

Industries develop around a specific region that’s useful to them, but still have global connections
Close to Silverstone race circuit and the area has lots of skilled workers. Internet is used to send and receive data globally

Question 5

Define TNC.

Answer 5

Transnational companies produce or sell products or are located in more than one country.

Question 6

How do TNCs increase globalisation?

Answer 6

Link countries together through production and sale of goods

Bring culture

Question 7

How do TNCs affect economic development?

Answer 7

Create jobs —> taxes and spending
Taxes improve infrastructure, attracts more businesses. Multiplier effect
TNC factories in poor countries where labour is cheap - get more money

Question 8

Advantages of TNCs

Answer 8

Advantages - create jobs with reliable income and some skilled jobs, which encourages education and training; spend money to improve infrastructure; new technology brought to poor countries; local companies supply TNCs, increases their income

Question 9

Disadvantages of TNCs

Answer 9

Lower wages for longer hours and bad in poor than rich countries; profits go back to rich countries; large sites attract traffic, increasing pollution; jobs aren’t secure, TNCs can relocate; local companies lose business

Question 10

Define industrialisation

Answer 10

Countries see a massive growth in their manufacturing industries

Question 11

Define globalisation. Why does it happen?

Answer 11

The process of the economies becoming more connected, as well as the integration of cultures and politics
Bigger volume and variety in international trade; economic interdependence between countries; flows of investment; improvements in communications/technology

Question 12

Define Foreign Direct Investment (FDI)

Answer 12

When a business from one country invests in/builds factories or offices in another country

Question 13

Advantages and disadvantages of industrialisation for a pre-industrial country

Answer 13

Advantages - higher GDP, higher value exports, higher wages (than agriculture)
Disadvantages - environmental damage (more CO2, etc), shortages of young people in rural areas

Question 14

Define outsourcing and give an example

Answer 14

A company ‘subcontracts’ part of its business to another company e.g Nike outsourcing in Asian sweatshops (Nike don’t actually run the factories or employ factory workers - they just buy the products from them)

Question 15

Define sweatshop

Answer 15

A factory where people work very long hours in poor conditions for low pay

Question 16

What is the role of the IMF (International Monetary Fund)? (3)

Answer 16

Prevents financial crises from growing and spreading (e.g Greece, provided financial aid) and prevents future crises
Checks investment and banks’ operations to prevent banking crises (e.g financial crisis of 2007-8)
Reduces global poverty by helping the least developed countries

Question 17

What is the role of the WTO (World Trade Organisation) and what effects does this have?

Answer 17

Negotiates deals between countries to reduce or remove tariffs/duties on trade
Leads to cheaper goods so people buy more; doesn’t benefit everyone

Question 18

How do TNCs grow? (2)

Answer 18

More sales/range of products e.g Apple (used to be only desktop computers, now smartphones, watches, etc.)
Merger (merging) with other companies (consolidation or conglomeration)

Question 19

Define consolidation and give an example

Answer 19

Companies that make similar products merge

E.g Sony bought Ericsson in 2011 to increase share of global market

Question 20

Define conglomeration and give an example

Answer 20

A company buys other companies that make various products

E.g LVMH owns at least four unrelated luxury brands e.g champagne (Moet & Chandon), jewellery (Bulgari)

Question 21

Define state-led investment and give an example of a country that does this

Answer 21

Economic growth is fuelled by government-run banks by funding state-owned companies, which can borrow state money at low interest rates
E.g China

Question 22

How has globalisation led to unequal impacts on men and women in Bangladesh?

Answer 22

Sweatshop owners employ young women, then discriminate against older women who have raised children.
Jobs in textiles are unskilled and about 70% are women.
There are more opportunities for men in transport and distribution, and retail.

Question 23

What are the main reasons for Bangladesh’s recent economic growth?

Answer 23

The government was happy to let TNCs pay workers very little (98% lower than in the EU and USA as of 2010)
Poverty is very high, so there are plenty of people willing to work for low wages